LONDON (Reuters) – A private equity consortium dropped its 1.9 billion-pound ($3.5 billion) bid for British media company Informa (INF.L) on Friday after Informa rejected a reduced offer, sending Informa shares as much as 9 percent lower.
Publishing and events group Informa, whose titles include the maritime newspaper Lloyd’s List, said earlier this month the revised offer of 450 pence per share significantly undervalued the company.
By 0719 GMT, Informa shares were down 5.8 percent at 322.25 pence, off a low of 310 pence, the only decliners in the DJ Stoxx European media index , which was up 3.6 percent.
The consortium of Blackstone (BX.N), Carlyle Group and Providence Equity Partners said they reserved the right to make or participate in an offer for Informa within six months under certain conditions.
“We originally believed the consortium were prepared to make a revised offer, but… events in the financial markets over the past week mean they were unable to finance an increased bid,” UBS analyst Polo Tang wrote in a note.
“In our view Informa has strategically attractive assets and the Providence approach was the second in two years; we would expect it to remain a consolidation candidate,” he added, keeping a “buy” recommendation and 550p price target on the stock.
The consortium, with a slightly different makeup, had first approached Informa with a preliminary offer of 506 pence per share, but reduced it after doing full due diligence.
It said on Friday it could return if another party bid for Informa, if Informa’s directors agreed, if Informa announced a “whitewash proposal” in response to another offer, or if there was a material change in circumstances.
Informa provides information to various clients on topics such as arts and humanities, social sciences, physical science, technology, finance, law, telecommunications, maritime trade, energy, commodities, and agriculture.
It also organises conferences and courses.
(Reporting by Varsha Tickoo in Bangalore and Georgina Prodhan in London; Editing by Jacqueline Wong and Sue Thomas)